Executive summary

UK Government and EU Commission asking the pharma industry to comment on their proposals to make clinical trials for innovative drugs less risky and the purchase of online pharmaceuticals safer.

 Currently, limited research can be conducted using patented products required for the regulatory approval of generic drug products without infringing UK patent rights. Clinical trials for new drugs are not exempt, which leaves a risk of being sued and increases the financial burden on companies conducting trials in the UK.  The UK government is therefore inviting comments on its proposal to exempt from patent infringement activities required to secure regulatory approval to market all drugs and/ or necessary to support health technology assessment. This article looks in more detail at the proposal and our concerns regarding its implementation. The consultation closes on 19 December 2012. 

The EU Commission has also been consulting on implementing a logo for legally operating online pharmacies. The aim is to make it safer to buy pharmaceutical products online by allowing consumers to verify an authorised seller by clicking on the logo. The article reviews the current consultation, which seeks opinions on the logo and the technical and cryptographic requirements for verification of the logo's authenticity. The deadline for comments is 17 January 2013. 

The UK Government and EU Commission are currently asking the pharmaceutical industry to comment on their proposals to make clinical trials for innovative drugs less risky and the online sale of pharmaceuticals safer for consumers.

1. Making the UK a more favourable place to trial new drugs

The UK Government has launched a consultation setting out its proposal for making the UK a more favourable place for pharmaceutical companies to carry out research and development regarding innovative drugs. "The [Intellectual Property Office ("IPO") is proposing to make changes to the Patents Act 1977 to make the system fairer by allowing clinical and field trials for new drugs to be carried out without risking being sued for patent infringement".

Background

Under current UK patent law, patented products may be used in research and tests required for the regulatory approval of generic drug products, without infringing the rights of the patent owners. However, clinical trials for new drugs are not exempt from patent infringement. Nevertheless, there are many instances when a company may need to use a patented drug in a clinical trial. For example, a company may need to compare its new drug to a patented product or may need to develop therapies, which combine the use of its new drug and a patented product. The IPO claims that the proposal removes the current risk of being sued, reduces the financial burden placed on companies conducting trials and creates a more supportive environment for research and development in the UK.

Patent laws in most European countries include an experimental use exemption to infringement (the "Research Exception") in line with international agreements. In the UK, the Research Exception is set out in section 60(5)(b) of the Patents Act 1977 but this has been defined narrowly by the UK Courts. Trials carried out to find out whether something works can be regarded as an experiment and this should include Phase I and Phase II trials. However, trials carried out to collect further data e.g. to demonstrate to a third party that a product works as in Phase III trials may not be included. Section 60(5)(i) of the Patents Act 1977 also exempts certain activities performed to obtain regulatory approval for generic drugs (the so-called "Bolar Exception"). However, this exemption does not extend to innovative drugs, unlike in other EU countries such as Germany.

Consultation

The proposal is therefore to amend section 60(5) of the Patents Act 1977 to provide an exception to patent infringement for activities necessary:

(i)  to secure regulatory approval to market all drugs (i.e. acts required by the Medicines and Healthcare products Regulatory Agency ("MHRA") or European Medicines Agency ("EMA")); and/ or

(ii) to support health technology assessment such as those conducted by National Institute for Health and Clinical Excellence ("NICE").

General comments on the proposal have been invited, although there are also a number of more specific questions:

  • Whether the amendment should exempt activities required to secure regulatory approval to market innovative drugs in: (i) all countries; or (ii) in the EU and EEA only. In addition, whether it should exempt activities necessary for health technology assessment; 
  • The costs that would be saved or the losses that would be suffered if the exception were in place;
  • Why stakeholders might risk infringing patents in preparing or running a trial involving innovative drugs;
  • Comments on the definitions of: (i) "Generic Drugs" ("Medicinal products to which the derogations in paragraphs 1 to 5 of article 13 of Directive 2011/82/EC or paragraphs 1 to 4 of Article 10 of Directive 2001/83/EC applies when seeking marketing authorisation"); and (ii) "Innovative Drugs" (those to which those exemptions do not apply); and
  • Comments on whether the exemptions should apply to micro-businesses.

Comment:

Whilst we welcome the consultation, we have several concerns about the form in which the exemption may be implemented. Thus, the potential inclusion of 'activities necessary for health technology assessment' in the exemption is too nebulous as it has the potential to include marketing activities which arguably should not be exempted.  If health technology assessments are included within the scope of the exemption the activities should be clearly defined and of limited scope.  Further, if the aim of the exercise is to place the UK on an equal footing with other European states, such as Germany, so as to promote clinical trials to take place in the UK, then the exemption should cover clinical trials in any country, not just EU or EAA Member States.  This would also prevent unnecessary litigation in cases where clinical trials are conducted with a view to obtaining regulatory approval in both EU/EEA countries and other countries.

Nonetheless, the proposed changes should provide some welcome legal certainty in this area, particularly in relation to Phase III trials. The pharmaceutical industry has been keen to change the way that clinical trials are treated with a previous consultation showing that 94% of participants wanted some form of change. The IPO now states that this consultation "offers a formal opportunity to shape the patent infringement provisions so that they can better support growth in this key industry sector". Subject to the outcome of the consultation, the government is hoping to implement any changes by 1 October 2013.

Deadline: Responses to the Consultation need to be submitted by 19 December 2012.

See full Consultation document here.

2. Proposed EU Logo for authorised Online Pharmacies

Meanwhile, the European Commission has released a Consultation on "Implementing a Common Logo for Legally-Operating Online Pharmacies/ Retailers offering Medicinal Products for Human Use for Sale at a Distance to the Public ("Online Pharmacies")". The aim is to make online shopping of pharmaceutical products safer by allowing consumers to click on a common logo to verify whether the Online Pharmacy is authorised.

In July 2011, Directive 2001/62/EC (the "Online Pharmacy Directive") was published, which introduced EU-wide rules for Online Pharmacies. These included the concept that any legally operating Online Pharmacy should display a common logo on every page of any website offering medicinal products (the "Common Logo"). The idea is that the Common Logo should be recognisable throughout the EU and should enable consumers to identify the Member State where the Online Pharmacy is established.

Member States are also obliged to set up a dedicated website providing a national list of legally operating Online Pharmacies (the "National List") and a hyperlink to the website of the respective operators. The Common Logo should contain a reciprocal hyperlink to the entry on the National List (the "Reciprocal Link"), which should allow customers to verify the authenticity of the logo displayed on the webpage of the Online Pharmacy.

The current Consultation seeks opinions on the design of the Common Logo and the technical and cryptographic requirements for verification of its authenticity.

Design of the Common Logo

The Commission asks for comments on two suggestions for the Common Logo:

Option 1:

Option 2:

The Common Logo will also have to include a national element and text making it clear that the presence of the Common Logo in itself is not sufficient to guarantee authenticity (because the logo may have been copied). The suggested text is "Click to check the website". The Consultation requests any comments on the national element, the text associated with the Common Logo and the size and position of the logo.

Technical, electronic and cryptographic requirements for verification of the authenticity of the common logo

In order for the Reciprocal Link to work reliably, the EU Commission suggests that it might be necessary to encrypt the information transit between the Common Logo and the National List. The Commission also suggests that the EU Medicines Agency and Member States should educate the public that the presence of the Common Logo doesn't itself guarantee authenticity: consumers have to verify the National List by clicking on the Common Logo. The Consultation asks for any comments on these ideas.

The deadline for commenting on this Consultation is 17 January 2013. The European Commission will then adopt implementing acts and Member States will have until 2014 to implement the Directive's provisions.

Comment

Fake medicines that have not been checked for safety and efficacy are a major threat to public health. EU Customs and other public authorities are seizing more of these dangerous medicines each year. An online logo, which will help consumers to buy safe medicines online and prevent falsified medicines entering the legal supply chain must therefore be welcomed. As websites selling counterfeit goods are generally becoming more sophisticated, authorised businesses need to keep ahead of the game in helping consumers to differentiate between authentic and unauthorised goods. The technical requirements of these authentication procedures should be considered carefully and this consultation is a good opportunity to ensure that the proposed system works correctly.

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